Thursday, 29 May 2014

With US equities holding moderate gains across the day, the VIX was naturally under constant downward pressure, settling -0.9% @ 11.57. Near term outlook is for the VIX to remain in the 13/11 zone until mid June.

VIX'daily3

VIX'weekly

Summary

Little to add.

VIX remains low..and even the mid teens look tough to hit for another few weeks.

Once the bigger weekly cycle starts to tick higher..then I will start to consider a VIX call block for a summer/autumn play...until then...I am content to wait.
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US indexes have broken new index highs, with sp'1917s...pretty incredible to see. VIX looks vulnerable to turning red, but then...11.70s...11.60s...does it really matter? Metals remain weak, and look set to close lower for the fourth consecutive day.

sp'60min

Summary

*battling to catchup on emails....
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Well, ALL the smaller index cycles are due to fall into the close...so...if I had to take a trade..I'd be short.

*as it is..I remain content on the sidelines. I can't short with the weekly cycles as they are.
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updates into the close..especially if we start to slip lower...although as I type...there is ZERO sign of this madness levelling out yet.
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US equities are holding minor gains, but those were more than enough to break new historic highs in the Transports and sp'500. The broader up trend most certainly continues..with 'small' risk of a retrace back to the 1902/00 zone. Metals remain weak, Gold -$3.

R2K, daily

Summary

R2K building a bull flag on the daily?

I'm certainly not buying at this level, I'd consider 1130/25...but there only looks to be a small chance of that.

After all, if GDP -1% can't kick the market lower, what can?

How about 'end of the world'? But that is bullish construction sector, yes ?
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*Just noticed..my email client has not been sending me notifiers all day..urghh.....bear with me
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2.26pm.. We're coming up to the typical turn time of the afternoon.

ALL smaller cycles are now over-stretched to the upside....90minutes for 'weakness into the close'.

A full reversal here would be kinda interesting...

For the day-traders out there...I'd guess it makes for a valid trade..but with a nano-tight stop!

US indexes continue to hold minor gains, with the Trans/SP' having broken new highs. There is next to zero downside pressure, and with GDP out of the way..the bulls have a clear run until the Friday/monthly close. Metals remain broadly weak, Gold -$3

sp'60min

Summary

I realise some will be looking to launch an index short, not least in the 1920s..but really..whats the best case downside..15..20pts..if that?

The second sig' QE-pomo of this short week, is no doubt negating what little downside pressure there is. Even the R2K (persistently susceptible to weakness) is moderately higher. Metals are fractionally lower, but look very weak into June.

sp'daily5

Summary

I suppose if I stared at the sp'500 daily chart long enough, I'd almost want to short..except...

sp'weekly8b

On any basis..trying to short into that sort of multi-week up wave..is plain stupid. Even I can see that.
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Good morning. Futures are a little higher, sp +3pts, we're set to open at 1912. Precious metals remain weak, Gold -$5. A minor retrace remains viable, back to the 1902/00 zone, before the 1920s next week.

sp'60min

Summary

*awaiting second reading for Q1 GDP
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There is reasonable chance of a minor retrace today, but then, the broader trend still remains to the upside. A minor fall to 1902/00 - where there is a rather obvious gap, would be a viable area to go long.

There is sig' QE-pomo today..so even if the market is moderately lower by late morning..the bears will likely face a latter day recovery.
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Video update from Mr Carboni

Like him or not....he has been especially right on Gold.
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Notable early strength: TWTR, +2.7%
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8.31am.. GDP revised from +0.1%... to -1.0%.... real ugly number, but market doesn't much care. After all, rest of the year is going to be rainbows and unicorns..yes?

9.00am.. So..once again, all that doomer chat about 'ohh, lets short, because GDP will be bad' amounts to nothing.. with sp +4pts.

Ohh, sure we could still fall as the day proceeds, but the QE will negate most, if not all of what little downside pressure there is.

With the sp'500 and Transports breaking new historic highs, those equity bears who have been short since the Feb' low continue to be ground into dust. With the R2K flooring in the 1080s last week, it remains highly suggestive of at least a few more weeks higher.

sp'weekly8

Summary

So...SEVEN consecutive green candles on the weekly chart, and anyone shorting this..is shorting into one hell of an up trend.

Where will it stop? The sp'1920s look likely next week..to begin June. The 1940/60 zone looks viable in mid June - around the time of the next FOMC.

Yet...maybe even higher? There are a few out there touting 'straight up..into the sp'2100s' in the current multi-month up wave (from Oct'2011).

Personally, I'm still seeking at least a 2-3 month wave lower this year..but hey..the months are already running out this year!

Looking ahead

There is the usual jobs data, but far more important...the second reading for Q1 GDP. Market is expecting a downward revision to -0.5.

*there is sig' QE-pomo of around $3bn, bears...beware.
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Just another day

It remains a truly tiresome market. The recent floor in the R2K/Nasdaq remains an issue I am still battling to assess. Was it merely the HEAD of a H/S now formed in the R2K, or was it just a giant 12 week down wave...with a far bigger multi-month ramp to new highs?

R2K, weekly'2, H/S

Well, the H/S scenario will indeed get dropped on any break into the 1200s....that is only 5% higher.

I will hopefully be around tomorrow, I suppose you could request a refund, but don't expect a reply.

US indexes closed somewhat mixed. Most notable, new historic highs for the Transports (8102) and sp'500 (1914). The two leaders - Trans/R2K, settled +0.7% and -0.5% respectively. Near term outlook is for continued broad market upside into mid June.

sp'daily5

R2K

Trans

Summary

Little to add.

ALL indexes are broadly trending higher, and the Feb' low of sp'1814 is around 100pts lower. The weekly/monthly charts are both suggestive of higher levels into June..possibly July. As a fair few are suggesting, the sp'1940/60 zone looks very viable, before this madness finally does max out.

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I (Permabear Doomster) am not a financial advisor as officially endorsed by any national government, corporation, financial/securities regulatory authority in neither the USA, UK, or any part of the world. None of the posts/comments in these pages are intended as trading/investment advice. They are merely my opinion on where a given market/stock and any other 'instrument, index, etc' may move at any future time.